The key variable in trying to forecast their cashflows is of...

The key variable in trying to forecast their cashflows is of course the copper price. At 20,000 tonnes a year even a 10c per pound increase to the price of copper adds over $5m to cashflow / revenue (and vice versa of course !).

The other variable is the "substantial reduction" in mining costs flowing from the EHL deal when it hopefully gets approved. It is hard to get a gauge on the value of this but based on the detail in the going concern note it appears to be about $1m a month but how much is cost reduction and how much is deferral I am not sure. How much they have been able to reduce other costs is also not fully known.

So based on the mid point of their forecasts and an AUD copper price per tonne $500 higher than what they achieved and remembering that the prestrip goes until mid year I get a back of envelope of:

Improved copper price on 2016 production levels + $6m
Increase in production levels in 2017 +$14m
Lower gold levels -$8m
EHL deal from April +$9m
Prestrip half year +$13m

So a back of the envelope improvement of $34m per year in 2017 and $50m in 2018 with no prestrip involved. Rough numbers but pretty substantial when you compare it to HGO's market capitalisation. Also highlights how hypersensitive everything is to the copper price.